Consider an industry that is made up of nine firms each with a market share (percent of sales) as follows:
a. Firm A: 30%
b. Firm B: 20%
c. Firms C, D, and E: 10% each
d. Firms F, G, H, and J: 5% each
What is the value of the four-firm concentration ratio and how is the industry categorized?
A) 50%; monopolistic competition
B) 70%; oligopoly
C) 75%; oligopoly
D) 80%; strongly oligopolistic
Answer: B
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Graphically, market demand for a product:
A. is the horizontal difference of the individual demand curves. B. is the horizontal sum of the individual demand curves. C. is the vertical difference of the individual demand curves. D. is the vertical sum of the individual demand curves.
Large quantities of many products produced in the United States are exported to purchasers in other countries. Exports account for the largest share of which one of the following products produced in the United States?
What will be an ideal response?
A major challenge faced by Western Union in wiring money between the United States and Mexico is that ________.
A) it can only transfer funds in one direction B) it is facing competition from some commercial banks C) Mexican citizens do not like to use its services because it does not have strong ties with Mexican banks D) Mexican citizens trust the banks but do not trust Western Union due to its heritage a
Which statement is INCORRECT with respect to sales promotion and advertising?
A. Perfect competition differs from monopolistic competition in that no individual firm in a perfectly competitive market will advertise. B. A perfect competitor advertises a product that is different from the products that all other firms in the industry are selling. C. Advertising should be carried to the point at which the additional revenue from one more dollar of advertising just equals that one dollar of marginal cost. D. A perfectly competitive firm, by definition, can sell all that it wants to sell at the going market price.